Skip to main content

About this Show

The Stream

News/Business. Wajahat Ali. Powered by social media, guests discuss untold stories, news and issues from across America. New. (CC) (Stereo)

DURATION
00:31:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel v107

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 9, Michigan 8, America 4, The City 4, Syria 3, Detroit 3, Cynthia 3, Jim 3, U.s. 2, Ahold 1, Tweet 1, Unelected 1, Viewer 1, Levin 1, Ali Velshi 1, Jonathan 1, Guyty Ang 1, Wayne 1, Average City 1, Ibrahim 1,
Borrow a DVD
of this show
  Al Jazeera America    The Stream    News/Business. Wajahat Ali. Powered by social media,  
   guests discuss untold stories, news and issues from across...  

    August 28, 2013
    7:30 - 8:01pm EDT  

7:30pm
>> detroit is in bankruptcy. who will catch the retirees as their pension had hang in the balance? [♪ music ] >> so much is riding on this issue, and our community has a lot to say about it. >> yes, this is the battle for detroit's future. who are the victims? who are responsible? and most of our economy seems to be empathizing with jonathan. retireeretirees are in now
7:31pm
automatically in danger of losing their homes and healthcare and may have to rely on food stamps. so, you the viewer at home, you are our community, and you are the third host of this show. throughout today's show tweet at us, and join the conversation. >> detroit may be at bankruptcy now but at its height it was an elite american city with booming business, bustling streets and adventurous nightlife along the whatever. detroits golden age was full of prosperity, promising a comfortable retirement for those who worked hard. but with the $18 billion debt that promise is in jeopardy. the pensions of 20,000 retirees are at risk as detroit no longer has the funds to meet its commitments. joining us is jim, one of the leading municipal bankruptcy attorneys in the u.s. who thinks that all sides in this case
7:32pm
really need to make some concessions. via skype from michigan is james, an economist at the mackinaw center. in detroit is david, a retire chemist with the water department and former union laird and cynthia, she and her two kids survive on her husband's pension who before passing away served 33 years as a detroit police sergeant. thank you all for being here tonight. david, i want to start with you. when you're in the prime of your career, working hard and you think it's all worth it. i'll retire comfortably, adequately, you can relax. how has been your retirement compared to what you expect it to be. >> well, lisa, we don't plan to quietly become victimized in our old age in our retirement by an imposed dictate who are is an emergency manager, unelected by
7:33pm
a federal judge who thinks egg overrule the state's constitution and take our pension, and especially by the banks who have destroyed detroit with their predatory mortgages, devastating neighborhoods we studying the tax base, and trapping the city in high interest loans that are guzzling money. >> we're going to get to the specifics of all that in a minute, but cynthia, there is this cloud that is hanging over all the retirees right now. that is the judge could allow this bankruptcy. that could drastically reduce the amount of money that people receive in their pension. i'm wondering how that possibility is affecting your every day life right now, and what you doing if anything to compensate for it? >> it affect my every day life very much. it's high angl angle guyty ang .
7:34pm
i'm depressed and very concerned and other pensioners are as well. we want to keep our head above waters and we want to fight for our rights as pensioners and we want to keep our pensions. >> you have a couple of kids at home as well, correct? >> yes, i do. >> what kind of toll has this taken on your family. >> it takes a toll on them because i'm telling them we're on hold. we don't know what is going to happen with your dad's money with this pension, with the economy, and what is happening to us as a family. so they're very concerned. >> cynthia, here is david, cutting pensions force the elderly back in the workforce and out of theirs homes and pungsinpunishing them for the c. and average pension $18,000.
7:35pm
this is from wayne county, michigan. it costs $1,650 just to survive. if you're a renter, $1,872 just to survive. how do we expect the retirees to survive off the pension it is they get cut even more? >> the real issue here is how do we find a way of helping detroit rebuild what it had previously, it's ability to provide jobs and opportunities to all of its people. pension funds are funded in our long-term obligations. the real question here is how do we make sure there is a future for detroit, a bright future that will provide the revenues to make thorough that employees are employed and pensions are paid. presently i believe the pension funds whether you believe it's
7:36pm
$3.2 billion or $2.5 billion is presently funded. present payments are there. it's unto the pension officials to come out with the right plan to make sure they get paid. it also means from the city side how do you have a recovery plan so the future of the city is there so payments will continue to be made. >> james, there are a lot of bad things going on in the city of detroit right for everybody. it's a city where 40% of the street lights have been turned off to save money. emergency services, if you call 911 it takes about 58 minutes on average to get a police car ambulance. in the average city it's 10 or 11 minutes. at this point what do you think is going to hurt more overall in detroit, additional cuts to the pensions or additional cuts to city services? >> well, well no one is happy about what is going on.
7:37pm
not the employees, not the residents and certainly not the state. they don't want to be running the city in bankruptcy. they've deferred their mismanagement problem for so long, but you can improve city services while lowering costs. now they've deferred, they've gone into so much debt there are likely going to be cuts coming, but for the first time in a long time i think people are hopeful about detroit's turn around. >> david, are you hopeful? >> i am hopeful that a mass movement of angry retirees city workers who have already taken 10% to 20% today cuts and other residents of the city will fight back and make the banks pay. these are criminal enterprises, and their debts should not--there would be plenty of money for everybody if the criminal banks don't take their cuts first.
7:38pm
they're listed as secured creditors, and retirees are listed as unsecure. >> i'm concerned about this view. creditors have lent detroit $1.4 billion to make sure the pension fun is in better position, and they're less secured than the retirement benefits themselves. creditors have helped detroit more so than they've hurt it. >> these banks trap the city to pay 6.3% interest in bond swaps in 2005, and the banks are only paying .6%. so the city was trapped at a time when the bankers knew that the rates were going to go down very low, the city was trapped into high interest. >> david in terms of ultimate blame, and we're going to get into this more in the show, but didn't the city's negotiate with the banks? wasn't this a decision on the part of city officials?
7:39pm
>> well, if you look at across the country this was not just detroit and a decision made by a couple of bad politicians. you have a conspiracy with the banks and the rating agencies pushing this on to cities across the country. and we've called on the securities and exchange commission to come in to explain to the judge how they rigged the mortgage crisis and then rigged these fraudulent bond swaps. >> our community says pension should be dropped from all future job compensation packag packages, a lot of people are framing this as retirees are holding this hostage for themselves at the sake of advancing detroit. do you think that's a fair frame here? >> no, i do not think it's a
7:40pm
fair frame because most of these--all of the pensioners have never paid into social security and their sole number are their pensions were if they're not going to have the pension they'll be rolled on to the state of michigan wai welfae rolls when they truly worked hard for their pensions. >> how did the city get here in the first place, and where can you point the finger of accountability. but first here are a couple of other stories we're following.
7:41pm
7:42pm
mission. >> there's more to america, more stories, more voices, more points of view. now there's are news channel with more of what americans want to know. >> i'm ali velshi and this is "real money." this is "america tonight." sglovrjs our -- >> our news coverage reveal more of america's stories.
7:43pm
>> it's a travesty to think that someone would go to court to take away pension. they worked for this for over 30 years. for someone as governor the state to go against his own constitution to try to take money from these people is a shame. >> well, detroit clearly didn't get into this financial crisis overnight. it's economic decline has been
7:44pm
at work for decades. how did detroit get here? >> the city has had bad public policies for decades. economies collapsed, but in the past decade or so they've been bothered by an acute level of mismanagement, not being able to do the basic things that other cities in the state of michigan can do despite getting more revenue and having special rules to give the city more money than any other city in the state of michigan. they can fix that, though. it's not a permanent solution. they're getting ahold of their books. they're trying to look for better ways to provide services. they're getting competent management, and that will go a long way to make sure that they prevent these problems from happening in the future. >> a lot of people say it goes deeper than that, and further back than that. >> people like nick are saying race plays a huge role. race riots in 1943 and 1960s
7:45pm
detroit, look, detroit is one of the most racially segregated cities in america. it's the home of race riots. talk to us how the racial tensions from the past and present played a role in bringing us where we are now. >> the differences, of course the economy, the fact that a lot of african-americans don't have a lot of opportunity with jobs and excess to better jobs outside of the city due to our poor bus system. that affects them. and then we have this division where people live. there are people who come to the city because they can afford to. there is a division because of the economics and opportunities as well. that kind of fuels that fire. >> we should also note detroit had a very integrated workforce in the factories after the rebellion of 1967.
7:46pm
these rebellions were against discrimination, racism and failure to hire african-americans in city jobs and factories. once that opened up detroit had one of the highest standards of living. the neighborhoods were beautiful. the factories were moved out by plan of the corporations trying to go to low-cost countries or areas of the u.s. finally we should point out detroit was coming back a little bit in the early 2000 from its decline. it was when the banks schemed up the predatory mortgages. mortgages in detroit were predatory and subprime, and it killed the tax base. 200,000 people left detroit, and they left when they lost their homes. this is the case. it was not caused by racial tensions in this city. i have lived here my whole life.
7:47pm
>> jim, david has brought this up a couple of times in terms one of the major reasons for the crash was the predatory lending and the banks. whether or not the banks have responsibility to bear, is there any way to legally hold them accountable as i think david was suggesting that he would like to see happen? >> well, you know, bankruptcy and financial distress is like open-heart surgery. the longer you take to get to the cure and finish the operation, the worse it gets. the key here, and there will be plenty of time for historians to assess blame, but what you need here is a recovery plan. we will can find a solution by
7:48pm
investing in infrastructure, back up guarantees and support to bridge the situation and basically turn it around because they invested.
7:49pm
>> finding a recover plan that works, bringing people together and make that work. >> as part of the recovery plan-- >> lisa? >> yes? >> go ahead. >> i'm not a high priced lawyer, and i'm not a high priced think tank consultant, but i'll tell you in alabama, jefferson county, 80% or more of jp morgan's chase's loans to that county were canceled, were just liquidated, canceled completely because of the unclean hands. they had been bribing officials to say that bankruptcy should just look forward is incorrect. a bankruptcy judge has to applied equity and fairness, and if someone carried out crooked operations in detroit, and you can look at senator levin's 2011
7:50pm
senate sub committee on investigations report, 600 pages on the criminal actions of all the big banks, not to mention the fact that we bailed them out for $700 billion without any accountability back in the early days of this decade. >> one more thing i want to get to in this segment, jim, when we talk about judges there is something going on here between state and federal judges. michigan does not allow bankruptcy protection from municipalities, but the federal government seems to be indicating that the state can apply for bankruptcy protection. if you had to look into the crystal ball here, who is going to prevail? jim? >> well, it is clear that michigan's law permits the state with the consent of the governor to allow municipalities to file
7:51pm
chapter 9 procedure. that is what is going to establish the constitution provides that laws involving bankruptcy and insolvency are created on the federal law and to be applied by the federal courts. and it needs the consent of the co-sovereign state to authorize their municipalities that file. most states do not authorize municipalities to file. only 12 states specifically authorize them. another 12 require consent or approval, and virtually all the other do not allow municipalities to while chapter 9. >> stay with us. can detroit recover from its economic crisis? but first check out the avatars behind me. if you're tweeting right now you're up there.
7:52pm
that's the headlines "consider this" is up next on al jazeera. ♪
7:53pm
>> welcome back. we're talking about detroit's pension battle and whether or
7:54pm
not it's possible to come back from this financial crisis. we're talking about $18 billion. is there a county in which a city is just beyond the reach of a recovery plan? >> in this case the debt service on those bonds, those pension liabilities, those unfunded retiree pension obligations are expected to eat up the budget in ten years. that's a level that you can't fix management and pay for. that's why they need to enter bankruptcy. more importantly is fix the major problems that this city services or that prevent the city from providing city services. >> detroit has an image problem, i don't think that's all, ibrahim said that detroit needs help from the streets to the lights and the government runedding it. 78,000 abandoned buildings, 40%
7:55pm
of the street lights don't work. a third of the ambulances don't work and it has the highest murder rate in four years. you've been a resident for years. talk to us what detroit was and with all these statistics that seem so dour do you think detroit can reach that glory again? >> i believe we can. we get rid of the corruption and we get rid of persons or governors trying to take over our city and give us an opportunity to infuse our city with money that is owed to us, and bail us out like they bailed the banks out. yes, detroit is and will have a comeback. >> the last 20 years of detroit city has been nothing but bail out after bail out. they get their revenue sharing and they get 60% of every other dollar that goes to local government. they have rewritten their tax law specifically for the city of detroit. they've allowed detroit to have
7:56pm
casinos that no other city has, although that might be changing in the future, and they already get more revenue per capita despite their economy than every other city in michigan. >> so bottom line mismanagement for you. >> well, it's not a revenue question. it's a mismanagement question, and then the debt problems the city faces are going to be ironed out in bankruptcy, we hope. >> you know, lisa-- >> it will be very close to having a valid, thriving at this. >> lee sharks first of all all these figures are being manipulated. the whole question of how much is unfunded in the pension is under dispute. whether the city manager bargained in good faith, that's in dispute. some of these bonds are backed up by the water revenue so they shouldn't be counted. this is something that our consultant should know, the
7:57pm
state withheld promised money from the city for over a decade. hundreds of millions of dollars were not sent here. 80% of all school monies that come to detroit end up going to pay bonds off on schools that have been built and leveled since then. >> david and sin i can't cynthis looking out for you? >> the people, our unions. >> our retirees. the people themselves will have to do this. we're looking, a lot of us are veterans of the civil rights movements. we know how to march. we've been marching, we've been protesting. if we have to go more aggressive in our protests we intend to do that. we are not going quietly into the night. we're not going to starve quietly. we're going to fight along side the city workers and the other residents, the lover of the art institute, they're talking about taking the art institute and
7:58pm
selling the art off. you know who did that last? the nazis did that and looted the cities. on october 5th we're calling on people around the country who are facing similar things to come to detroit for a mass people's assembly against the banks and against austerity. we're looking-- >> i'm going to go with you on this. >> this is a national fight. >> this is what our community says. is there another city in decline comparable to detroit. if there is, fair question. if not, outliers do not set the rules. if pensioners are not treated fairly then it will set a bad example for others cities with pensions problems. >> unfortunately detroit has one of the longest histories of erosion and decline, which is unfortunate. other cities like new york, cleveland, philadelphia, in 1975, '78, '91 all this problems. they worked with their state. they came together.
7:59pm
they solved those problems. they put in the controls necessary to ensure that they had the services, they had the infrastructure to attract business, create new jobs for their people, and that led the way to a successful recovery. >> james, we have 20 seconds left. >> yes, the mismanagement and corruption is even present in the pension funds. a couple of board members and lawyers are under indictment. that's the problem in detroit. they're supposed to have the backing of employees and residents-- >> and they don't. that's all the time we have. thank you, we appreciate the conversation. until next time we'll see you online.
8:00pm
. >> welcome to al jazeera and this they were news hour. tonight our top story is syria. will the united states use military force against that country and when? >> president obama is speaking out about syria. he said he's considering a military attack when he called a shot across syria. he wants to deter the use of chemical weapons. offer in his interview he also said he has not made a final decision. >> i have

Terms of Use (31 Dec 2014)